Intrepid Mines Releases Financial Report and Management Discussion & Analysis for Second Quarter 2014

30.07.2014  |  Marketwired

Three and Six Months ended 30 June 2014

BRISBANE, AUSTRALIA--(Marketwired - Jul 30, 2014) - Intrepid Mines Ltd. (ASX:IAU) (the "Company" or "Intrepid") is pleased to announce the release of its Quarterly Financial Report for the period ended 30 June 2014 The documents will be available on SEDAR (www.sedar.com) and the ASX website (www.asx.com.au), as well as on the Company's website (www.intrepidmines.com).

All dollar values are United States Dollars unless otherwise stated.

OVERVIEW

Intrepid Mines Ltd.'s ('Intrepid' or the 'Company') principal activities for the quarter under review were the receipt of the settlement proceeds with respect to the Tujuh Bukit Project ('Tujuh Bukit' or the 'Project') and, the identification and review of additional mineral projects and advanced exploration assets, for potential investment purposes.

With the settlement of the Tujuh Bukit dispute the Company will continue to evaluate the best disposition of its cash resources which may include investment in a mineral project as an alternative, a default of a return of capital, or a combination of these two alternatives. A review of the optimal mechanism for a return of cash has commenced and includes consideration of potential costs, taxation effectiveness and timing issues for shareholders.

During the quarter, and immediately post the settlement of the Tujuh Bukit dispute, the Company embarked upon pre-determined arrangements to close both the Jakarta and Perth offices.

CORPORATE

• On 19 February 2014 the Company announced that it had signed agreements to settle all disputes surrounding the ownership of the Project which would result in the Company receiving a consideration of $80.0 million in cash. At the Extraordinary General Meeting of the Company on 9 April 2014, shareholders voted overwhelmingly in support of the resolution to approve the agreements to settle all disputes surrounding the ownership of the Project. The Company received $80.0 million in cash on 10 April 2014.
  
  
• On 13 March 2014 a notice was received under Section 249D of the Corporations Act 2001 (Cth) ('Corporations Act') from shareholders Quantum Pacific Investment Limited (Quantum) and Fides Capital Partners Limited who together held approximately 5.67% of the Company's issued capital, requesting that the Company hold a general meeting of shareholders to consider resolutions to remove five existing directors and appoint three new directors. The meeting was held on 13 May 2014.
  
  
• A second notice under Section 249D of the Act from the same shareholders, requesting that the Company hold a further general meeting of shareholders to consider resolutions to effect a return of capital to shareholders or a share buyback was received on the same date. The resolution as provided would have resulted in the Company being unable to meet its solvency obligations and accordingly directors were unable to accede to the request to call this meeting.
  
  
• Directors advised that, by no later than the Annual General Meeting ('AGM'), the Company would put forward a resolution for a shareholder vote that provided for a cash return to shareholders of net excess capital. Directors confirmed that the Company would not make any project acquisition or investment prior to the AGM without shareholder approval. Directors also advised that should an outstanding investment opportunity arise in the interim, the Board may decide to put such an opportunity to a shareholder vote as an alternative to the proposed cash return.
  
  
• Shareholder Quantum issued the Company with a notice under which it nominated three persons to stand as candidates for election as directors of the Company at the AGM to be held on 30 May 2014.
  
  
• At the Extraordinary General Meeting on 13 May 2014, the shareholders of the Company voted to replace existing directors Messrs Jackson, Curtis and McDonald with new directors Messrs Mazur, Sanderson and Lim.
  
  
• On 19 May 2014, the company issued a revised notice of Meeting for the Annual General Meeting (AGM) which incorporated technical amendments to reflect the vote at the EGM on 13 May 2014 and to change the directors' recommendation on the resolution for a return of capital to recommend that shareholders vote in favour of the recommendation. At the AGM on 30 May 2014 shareholders rejected the return of capital resolution but passed all other resolutions.
  
  
• Company announced that the Company had been notified by Toronto Stock Exchange of its intention to delist Intrepid Mines Ltd. securities effective at the close of market on 3 July 2014.
  
  

Subsequent Events

On July 3 the company was delisted from the TSX as the Company could not demonstrate that it held an interest in an active business.

BUSINESS DEVELOPMENT

• A short list of operating, development and advanced exploration projects for potential investment has been identified.
  
  
• Detailed evaluation and due diligence, including site visits to several mineral projects has been completed or is scheduled.
  
  

FINANCE

• Group profit after tax for the three and six months ended 30 June 2014 was $87.9 million and $83.8 million (respectively). This compares to a profit of $0.3 million for the three months to 30 June 2013 and loss for the six months to 30 June 2013 of $4.4 million.
  
  
• Group profit after tax includes $80.0 million in proceeds from the Tujuh Bukit settlement received on 10 April 2014.
  
  
• Treasury cash, cash equivalents and term deposits - $164.6 million at 30 June 2014. During the six months ended 30 June 2014, the directors amended the investment policy to allow majority of the cash and cash equivalents and term deposit greater than 3 months to maturity to be held in Australian dollars. Previously there was a requirement to hold an approximate 50% in Australian and United States dollars.
  
  
• Directors continue to subscribe each month for shares in the Company, from fees receivable.
  
  
• The total comprehensive income of $89.5 million and $87.6 million (respectively) for the three and six months ended 30 June 2014 includes gains of $1.6 million and $3.8 million (respectively) arising from the impact of the appreciation of the Australian Dollar against the US Dollar during the respective periods, on Australian dollar denominated assets (refer to Note 9 of Management's Discussion and Analysis for the three and six months ended 30 June 2014).
  
  
• As a result of the Tujuh Bukit settlement, the Company reversed the provision for litigation previously recognised in respect of the IndoAust litigation (refer to Note 5 and 18 of the AFR, and Note 15 of the Interim Unaudited Financial Report for the three and six months ended 30 June 2014).
  
  

Forward Looking Statements

This announcement contains certain forward-looking statements, relating to, but not limited to Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.

Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Statements relating to gold resource estimates are expressions of judgment, based on knowledge and experience and may require revision based on actual production experience. Such estimates are necessarily imprecise and depend to some extent on statistical inferences and other assumptions, such as gold prices, cut-off grades and operating costs, which may prove to be inaccurate.